The significant rise in Bitcoin fees is proving to be a blessing for Bitcoin miners ahead of the upcoming halving event. Daily Bitcoin fees have reached $11.63 million, surpassing Ethereum for the first time in three years, with Ethereum recording only $8.44 million during the same period. This shift in transaction fees is attributed to the multi-functional blockchain platform that has enabled various decentralized applications (dApps) and non-fungible tokens (NFTs), leading to increased transaction fees on the Ethereum network.
This diversification has attracted significant user activity, especially in the thriving decentralized finance (DeFi) sector. This period of Ethereum dominance as a versatile platform compared to Bitcoin, which primarily functions as a digital currency, raises the question of a game-changer.
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Starting from the beginning of November, fees have notably escalated, reaching $18.69 per transaction on November 16 – a nearly 1000% increase from the fees recorded on November 1. Some experts view this spike in transaction fees as a positive development, arguing that high fees contribute to the sustainability of the Bitcoin network, particularly in the context of decreasing block rewards for miners.
The recent surge in Bitcoin transaction fees comes at a critical time for Bitcoin miners, as the upcoming halving event scheduled for the next spring will reduce block rewards from 6.25 Bitcoin to 3.125 Bitcoin. In this scenario, high transaction fees may become a more significant part of miners’ revenues, potentially representing 20%-30% of the block reward.
This shift towards fee revenues is considered crucial for the long-term sustainability of Bitcoin mining operations and transaction verifications.
Bitcoin now also outperforms Ethereum in NFT sales.
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